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Thursday July 01, 06:57
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Ringtones, Ringbacks An Opportunity For Carriers
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Although the global mobile phone ringtone market, which research firm Ovum estimates at about USD 2.5 billion, represents about 10 per cent of the USD 32 billion global music market, “ringbacks” are potentially an even bigger opportunity for wireless service providers. By 2008, Ovum predicts mobile content such as ringtones, ringbacks and entire songs, to comprise 28 per cent of total music sales, up from 1 per cent in 2003. Sun Microsystems believes ringtones will eventually constitute 20 to 30 per cent of the global music market, while research firm Strategy Analytics expects global ringtone sales to top USD 4 billion in 2004.
With a 2003 Forrester Research survey finding almost 40 per cent of cell phone subscribers aged from 18 to 24 years old, to be willing to buy ringtones, wireless service providers are investigating the opportunity. Ringtone sales in the US totaled just USD 80 million in 2003, but Ovum analyst Adam Zawel expects this total to exceed USD 1 billion before long, as ringtone-enabled phones reach the US market. Gartner analyst Michael King however predicts the music industry, not wireless operators, to benefit most from ringtones, given the licensing fees from passing content to service providers for conversion into ringtones.
All major US carriers are said to be buying the gear to distribute ringbacks, which reside on a network, as opposed to ringtones being downloaded to a phone. Ringbacks, or the tunes played when a cell phone user returns a call, already generate USD 9 million per month in revenue for Korean telco, SK Telecom, while another Korean telco signed up 100,000 ringback subscribers in a week. Zawel predicts US carriers to charge ringback subscribers USD 2 to 5 per month for the service plus USD 1 for each new ringback tune, while Ovum expects the global ringback market to rise from USD 148 million in 2003, to USD 2.4 billion by 2008.
(Business Wire)
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